Buying a home in Irvine? How to avoid appraisal issues from popping up!

by Robert Mack on August 5, 2010

in Buyers, Latest News

With the overwhelming number of short sales available for sale in Irvine, Orange County, the demand for standard re-sale and bank owned homes have become dramatically high!  From personal experience, many home buyers become very frustrated with the long drawn out process (not to mention the amount of uncertainty) of waiting for a short sale approval and because of this, they tend to shift their focus to standard re-sale and foreclosure homes because of the fact that they can get an answer back right away!Appraisal

Due to the high demand of these types of sales it is not uncommon for multiple buyers to outbid each other to be the highest bidder and ultimately have their offer accepted.  Keep in mind that many bank owned homes and even some standard re-sale homes in Irvine list their homes below market to actually create a multiple offer situation.  Most of the time, these homes will sell for above what the seller is asking, and this can create some future problems if the agent you are working with is not doing their due diligence with helping you understand what the fair market value is.

Everyone knows that when the market was hot and we were in a bubble, there were no issues with home values going up on a weekly basis, and some appraisers were going with the flow and not questioning the over bidding, however now that the market is the way that it is, appraisers are much more conservative!

As a buyer in this type of situation, it is important that you have your agent run the comparable sales for this home and determine a market value range.  If your agent cannot support the value that you are offering, then the chances are that neither can the appraiser, and if this happens there WILL be a problem in the future.  There is nothing wrong with overbidding your competition, just make sure when you do this, that there are recent sales to support the value that you offer.

This is something that both buyers and sellers should be aware of.  Most sellers also need to understand that if a buyer is offering them a price for their home that cannot be justified, everything may fall apart in escrow and now as the seller you have lost valuable time in marketing your home to other buyers.  As a rule of thumb, it is crucial that both buyer and seller understand the market value and understand what lenders are looking for so that the escrow process will be smooth from start to finish!

To learn more about the different types of sales in Irvine, Orange County CLICK HERE!

To learn 7 ways to get your offer accepted on a bank owned (OR any) home CLICK HERE!

Questions, comments, thoughts are always appreciated!  My goal is to provide you, the reader, with up to date current information that you care about and feedback from you would inspire me more than you can imagine!  Robert Mack!

 

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Post by Robert Mack

Robert has written 727 articles.

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JB August 21, 2010 at 6:27 pm

I have two listing currently in Irvine and I am sweating the appraisals. I was in the lending business for over 25 years in OC and it’s worse now than ever.

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